Analyst: Google Phone Won't Ding Apple's iPhone

BroadPoint AmTech analyst Mark McKechnie said a Google smartphone made by one vendor would be preferable to devices that pair hardware from Motorola, HTC and others with software and services from Google. The analyst said a Google phone would be a fine growth opportunity for the search engine as it seeks to extend its tendrils on the mobile Internet. Apple, by virtue of its singular choke point for hardware, applications and services, is best positioned to weather any Google phone attack. McKechnie expects 37.3 million iPhones will be sold worldwide in 2010, and said Apple could double its market share within a few years.

An industry analyst said a Google smartphone made by one vendor would be
preferable to devices that pair hardware from Motorola, HTC
and others with software and services from Google. However, such a device is
unlikely to ding Apple's iPhone.
Rumors of the so-called Google Phone resurfaced Nov. 17 when TechCrunch reported
that Google is building its own phone, which is being produced by a major phone
manufacturer but will only have Google branding.

The report angered industry watchers who believe
such a move would fracture the open-source development community that has
coalesced around the Google Android mobile operating system, an open-source
alternative to proprietary mobile platforms from Apple, Palm and Research In
Motion. After all, the Android ecosystem appears to be flourishing, with
Verizon Wireless teaming with Motorola and HTC
to sell the Droid and Eris, respectively.

While tempers flared over the issue, BroadPoint AmTech analyst Mark
McKechnie took a more temperate view of the idea, arguing the pros and cons of
such an announcement in a research note Nov. 19. McKechnie thinks the device is
a go:

"Although there has been chatter for years about a Google phone, we
think this time it is different and that there may be some truth to the current
news flow about a GOOG-branded phone/mobile device. While our discussions with
Google have consistently elicited 'no comment,' the company has also repeatedly
passed on the opportunity to dismiss the idea."

The analyst, who reported that Motorola is on pace to sell 600,000 Droid units
this year, said a Google phone would be a fine growth opportunity for the
search engine as it seeks to extend its tendrils on the mobile Internet.
Even though Android is getting solid traction with consumers, OEMs and wireless
carriers, a Google Phone would, like Apple's popular iPhone and RIM's BlackBerry
line, be an integrated hardware-software solution, providing smoother
performance. McKechnie added: